LSI Industries acquires ADL, wins LED retrofit contract

July 2, 2009
LSI Industries is acquiring ADL, an LED engineering and manufacturing business, and has also won a major retailer retrofit program for its LED lights.
LSI Industries Inc. has been selected by a major petroleum/convenience store retailer to upgrade and re-image its canopy lighting, site lights, and security lighting on a nationwide basis utilizing LSI's recently introduced solid-state LED Crossover(r) lighting fixtures.

The initial phase of this program will involve the conversion of over 1,100 individual retail stores. LSI believes this program represents the largest single national conversion of conventional-to-LED based lighting ever undertaken.

LSI's graphics division will also retrofit exterior fascia graphics lighting using LED technology for the convenience stores.

Energy savings were a major motivation for this conversion program, says LSI, and work is already underway. The company expects to earn revenue of $22-23 million from this phase of the project. Additional follow-on conversions for this customer's stores are also possible.

Headquartered in Cincinnati, Ohio, LSI describes itself as “an Image Solutions company, dedicated to advancing solid-state LED technology in lighting and graphics applications.”

LSI acquires ADL

LSI has reached an agreement in principle to acquire a Columbus, Ohio-based business, ADL Technology and related companies, that design, engineer, and manufacture custom designed circuit boards, assemblies, and sub-assemblies used in various applications including the control of solid-state LED lighting.

Subject to completion of due diligence and finalization of a definitive purchase agreement, this acquisition is expected to close before the end of July. The purchase price is expected to be approximately $13 million, a significant portion of which is expected to be shares of LSI's common stock, plus the assumption of approximately $4 million of long-term debt.

Robert Ready, president and CEO of LSI, said the company had made the decision to vertically integrate its capabilities in connection with designing, engineering, and producing the solid-state electronics that control and power LEDs.

“For the past two years, we and our Montreal-based engineers at LSI Saco Technologies have been working with the talented engineering and manufacturing people at ADL Technology,” said Ready. “As part of the LSI family, ADL will allow us to stay on the leading edge of product development while at the same time providing opportunities to drive down manufacturing costs and control delivery of key components.”

ADL's capabilities will also have applications in LSI’s other LED product lines such as digital scoreboards, and advertising ribbon boards and billboards.

Ready commented that the interest and momentum in LED-based lighting solutions is growing rapidly. “Evidence of this interest in LEDs is everywhere, from trade shows to customer inquiries, to the popular press. LSI has taken the necessary steps to become a leader in providing advanced solid-state LED lighting products through its various Crossover(r) product lines, which are designed to serve its core niche markets as well as the broad commercial and industrial lighting market.”

Ready added that LSI has been actively developing an international presence for our LED product lines. “I am pleased to say we now have our first UK-based prototype installation in place and initial reports indicate the customer is extremely pleased with the results.”